19 Aug 2009 13:19

CMES net profit plummets 74 pct year-on-year to $32.36 mln in H1

Shanghai. August 19. INTERFAX-CHINA - The net profit of China Merchants Energy Shipping Co. Ltd. (CMES), a leading Chinese oil shipper, fell by 74.17 percent year-on-year to RMB 221 million ($32.36 million) in the first half of this year due to weak global oil demand, according to the company's first half earnings report released on Aug. 19.

CMES's business revenue over the first six months of this year stood at RMB 901 million ($131.92 million), declining by 44.84 percent from the same period a year ago.

The economic downturn dragged down average daily global oil demand by 3.05 million barrels, or 3.5 percent, over the six-month period, which was the largest contraction since 1983, CMES said.

Oil demand of developed countries was hit particularly hard by the downturn, CMES said. Even in China, whose economy has been among the most resistant to the downturn, oil demand stayed flat over the period.

Meanwhile, the growing number of oil shippers that started operating in the first half dragged down shipping fees, which hurt the profitability of existing companies, including CMES, it said.

CMES shipped 11 million tons of crude oil in the first half of this year, up 2.12 percent year-on-year. Its major customers are oil companies and traders in China, South Korea, Southeast Asia and the United States.

CMES forecast that its net profit in the first nine months of the year will fall by more than 50 percent from the same period in 2008, citing estimates that the global oil shipping business will likely remain slow. CMES reported a net profit of RMB 136.87 million ($20.04 million) for the first nine months of 2008.

Following the announcement, CMES's share price fell by RMB 0.25 ($0.04), or 4.61 percent, from the previous day to close at RMB 5.17 ($0.75) on the Shanghai Stock Exchange on Aug. 19.